The Federal Reserve announced yesterday that their Primary Market Corporate Credit Facility (PMCCF) has begun operations. The Fed announced the PMCCF in March as one element of their pandemic response. Under the program, the Fed has committed to buy certain new issue corporate bonds and syndicated loans from qualified issuers. The Fed will focus on deals with maturities of four years or less. Issuers must be investment grade or, if rated at least BB-/Baa3, they must have been investment grade as of March 22. Banks are not eligible issuers. Other CARES Act requirements apply as well. The Fed is prepared to buy as much as $750 billion of eligible corporate loans and bonds across the PMCCF and a similar secondary market facility.
The Fed has revised their term sheet for the program with up-to-date requirements and details. The term sheet is available here. A FAQ document with additional program details is available here.
